The cedi will still lose value against major trading currencies before close of year even if Ghana secures an International Monetary Fund (IMF) bailout program.
This is according to currency analyst with Gold Coast Security, Samuel Ampah.
[contextly_sidebar id=”I5c1pw3X5ywztp40xIwoiENLMDOkxw23″]Contrary to the position of some financial analysts who are optimistic the IMF program will help the cedi regain grounds against major trading currencies after losing in excess of 30% in value last year.
According to the Head of the Finance Department of the University of Ghana Business School Dr. Godfred Bokpin, “the decision to go to the IMF paid off even in the foreign exchange market and with the issuance of the Eurobond, now we have to work to ensure that the deal is agreed and that implementation has started…otherwise if we don’t work so hard to finalize the program we will see some level of pressure being brought on our currency (Cedi)”.
But Samuel Ampah disagrees and said the current structure of the economy does not inspire confidence in the currency.
“The cedi will lose value in 2015 even if the IMF does come in. The IMF will come in and sit behind and watch how we are able to manage targets. They are coming to give us targets and if we are not able to manage the target s and achieve the target, the IMF value that they put into this country might not necessary go to shore up the value of the currency , No. It will bring some level of credibility but however the situation is that bad in this country that it will not immediately save the cedi”, he stressed.
The head of Standard Chartered Bank Africa research Razia Khan has predicted the cedi will depreciate to 4cedis 20 pesewas against the US dollars before close of year.
But the prediction will be revised if Ghana secures a program with the IMF.
The Ghana Head of the IMF Negotiation Team, Dr. Kwesi Botchway says the programme should take off not later than April this year when the IMF Executive Board meets.
According to him government has concluded most of the outstanding issues concerning ongoing negotiations with the IMF.
Rabiu Alhassan/citifmonline.com/Ghana